It's a bit of a hassle to make that transfer at Times Square, the lines are not right next to each other, and there may be some walking. If you have bags I wouldn't do it, and if it's rush hour I wouldn't do it.

If you are taking the bus from EWR, consider taking it to Grand Central instead.

It's doable as a walk, but it's a bit of a stroll. Cab is probably the easiest.

Hopstop.com by the way is a great way to plan transportation in New York, they have added a taxi estimated cost to their routings to help you decide.